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Privatization of the Française des Jeux : the individuals served, but at a heavy price

The initial price will be set at the maximum level, is 19.90 euros per share, announced Bruno The Mayor, November 20. But all the requests will not be met. pre

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Privatization of the Française des Jeux : the individuals served, but at a heavy price

The initial price will be set at the maximum level, is 19.90 euros per share, announced Bruno The Mayor, November 20. But all the requests will not be met.

predictably, the privatization of the Française des Jeux (FDJ), including the subscription of shares was completed on Tuesday evening to 20 hours, is a success.

in view of the strong demand relative to the number of shares sold in connection with the offer to open price (OCT), the initial price, which should fall within a range of 16,50 at 19.90 euros, will finally be set at the maximum level, is 19,90 € per share, announced the economy minister Bruno Le Maire.

The company would be valued at 3.8 billion euros, nearly double its turnover, expected this year to around 2 billion, and nearly twenty times its earnings, a level of value higher than the average of companies listed on the stock Exchange. According to our information, a lot of intermediaries, banks and Stock brokers have been overwhelmed by an influx of subscriptions for shares FDJ unknown since years on the occasion of a Stock market flotation of this type.

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A number of shares insufficient

Result, the number of shares offered is insufficient to fully satisfy all the requests. Investors and individuals have requested the total for 11 billion euros of shares, is a "spectacular success", welcomed the minister, who said that 40% of the titles would be reserved for individuals.

READ ALSO >> Française des Jeux (FDJ) : an investment winner, but not without risk

"There's a lot of calls and a very strong customer demand for this operation," explains an operator room market broker online Stock market Direct. Although we have made an interface for the subscription line in which it was sufficient to indicate the amount you want to subscribe in two clicks, there are a lot of calls because the cases are many". This is the case, for example, the investment clubs, these accounts of shareholders in joint ownership does not have legal personality but did not have access to the orders reserved for individuals. They had to pass orders "B", as if it were institutional investors, with the risk that their demand for securities to be reduced in proportions to be even more important than for the orders of natural persons.

the Same response at the online broker Fortuneo, which has warned its customers as soon as Wednesday of the risk of reduction of the number of shares allocated relative to their requests.

40% of the shares on sale are reserved for individuals

According to the terms and conditions provided by the JDF, in the event that the total demand of orders A1 (reserved for individuals, up to 5000 euros) is estimated to represent over 90% of the final number of shares offered in the framework of the OCP (offer-to-open price), the orders A1 could be reduced, that is to say that investors will only get a proportion of the amount requested.

The terms of reduction in final for each category of order were announced in the late afternoon in a notice of Euronext Paris.

READ ALSO >> Privatization of the FDJ : the tobacconists big winners of the operation

At a price of 19.90 euros, the orders of priority of individuals and tobacconists accounted for a little less than 1.5 billion euros, it was therefore necessary to distribute these requests with care to avoid a general disappointment.

a total of over half a million investors subscribed to the transaction, of which 483 775 individuals who filed an order of A1, less than 5 000 euros. These are served to 100% up to 2000 euros, or 102 shares at a price of 19.50 euros, taking into account the promised rebates of 2% compared to the official price of 19.90 euros. Beyond 2000 euros, the orders A1 are served at a rate of 10%, or about 300 euros more for the individuals who have asked for 5000 euros of shares FDJ.

A quote that will take off ?

The levels A2, to individuals beyond 5000 euros, and orders B, for the corporations, or investment clubs, have not been served at all. A bit privileged as it was planned in the project of privatization, tobacconists, on which is based the JDF to sell its games, have got 100% of the amounts they asked for, in the limit of 7,500 euros per person. 3727 tobacconists have acquired 704 623 shares FDJ, is 189 shares on average per retail outlet.

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a Victim of its success, the stock should take off at the first quotation as soon as Thursday morning (21 November), under the pressure of buyers wishing to complete their investment. The low amounts obtained may still lead to disappointment and costly for customers who purchased through their agency banking, especially for those beginner in the Stock market with this single action in the portfolio. Depending on the flexibility of their intermediary, some could even resell their shares FDJ tomorrow on Euronext, before you have paid, the settlement of the transaction occurs on Friday, November 22.

Read our complete file

Francaise des Jeux (FDJ) : an investment winner, but not without risk Française des Jeux : the privatization process was officially launched Investment : the good, the collections on which to bet by 2019

"a few months ago that the Federalration of investors and clubs (F2iC) argues that these privatisations are a formidable teaching tool, to explain to our fellow citizens the role of the stock Exchange, and indicate that this is a national issue, and that the savings of French people to invest in our businesses, " said Charles-Henri d Auvigny, president of the association of small shareholders. But the government did not take the path. With the proposed offer, it is more similar to the casino".

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